UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

             ------------------------------------------------------
             ------------------------------------------------------

                                    FORM 10-Q

(Mark One)
     x          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2000

               TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 000-23953


                              OMEGA WORLDWIDE, INC.
             (Exact name of registrant as specified in its charter)



         Maryland                                      38-3382537
  (State of Incorporation)                  (IRS Employer Identification No.)




                 900Victors  Way,  Suite 345,  Ann Arbor,  MI 48108
                    (Address of principal executive offices)


                                 (734) 887-0300
                     (Telephone number, including area code)


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days.

   Yes        X        No
           ---------         ---------

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock as of December 31, 2000

 Common Stock, $.10 par value                               12,340,533
           (Class)                                      (Number of shares)

<PAGE>



                             OMEGA WORLDWIDE, INC.

                                   FORM 10-Q

                               December 31, 2000

                                     INDEX
<TABLE>
<CAPTION>

                                                                                               Page No.
                                                                                               --------
<S>     <C>    <C>    <C>    <C>    <C>    <C>
PART I       Financial Information

Item 1.      Financial Statements:

             Condensed Consolidated Balance Sheets
               December 31, 2000 (unaudited) and September 30, 2000 ...........................    2

             Condensed Consolidated Statements of Operations (unaudited) -
               Three-month periods ended December 31, 2000 and 1999 ...........................    3

             Condensed Consolidated Statements of Cash Flows (unaudited) -
               Three-month periods ended December 31, 2000 and 1999 ...........................    4

             Notes to Condensed Consolidated Financial Statements
               December 31, 2000 (unaudited) ..................................................    5

Item 2.      Management's Discussion and Analysis of Financial Condition and Results of
               Operations .....................................................................    10

Item 3.      Quantitative and Qualitative Disclosure About Market Risk ........................    12

PART II      Other Information


Item 5.      Other Information ................................................................    13

Item 6.      Exhibits and Reports on Form 8-K .................................................    13
</TABLE>
<PAGE>
                         PART 1 - FINANCIAL INFORMATION

Item 1.  Financial statements

                             OMEGA WORLDWIDE, INC.

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (In thousands, except par values)


<TABLE>
<CAPTION>
                                                                                                 December 31,          September 30,
                                                                                                     2000                 2000
                                                                                                     ----                 ----
                                                                                                 (Unaudited)            (Audited)
                                         ASSETS
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Current Assets:
  Cash and short-term investments ................................................................ $  2,544            $  3,415
  Restricted cash ................................................................................    2,838               2,786
  Patient receivables ............................................................................    7,686               7,763
  Other current assets ...........................................................................    3,293               3,026
                                                                                                      -----               -----
     Total Current Assets ........................................................................   16,361              16,990

Plant, property and equipment, net of accumulated
  depreciation of $1,833 and $1,416, respectively ................................................   14,147              14,560
Investments in and advances to Principal Healthcare Finance Limited ..............................   41,099              42,735
Investments in Principal Healthcare Finance Trust ................................................    7,089               6,930
Prepaid rent .....................................................................................    2,916               4,031
Rent deposits ....................................................................................    3,407               3,657
Other assets .....................................................................................    3,274               3,597
                                                                                                      -----               -----
                                                                                                     71,932              75,510
                                                                                                     ------              ------
Total Assets ..................................................................................... $ 88,293            $ 92,500
                                                                                                   ========            ========

                          LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
   Short-term debt ............................................................................... $  5,351            $  7,755
  Accounts payable and accrued expenses ..........................................................   13,742              15,190
  Accrued income taxes ...........................................................................      348                  80
  Deferred income ................................................................................       43               1,072
                                                                                                     ------               -----
    Total Current Liabilities ....................................................................   19,484              24,097
Long-term debt ...................................................................................    2,038               2,323
Other long-term liabilities ......................................................................      266                 322
                                                                                                     ------              ------
Total Liabilities ................................................................................   21,788              26,742
                                                                                                     ------              ------

Shareholders' Equity:
   Preferred Stock $1.00 par value:
       Authorized - 10,000 shares
       Outstanding 260 Class B shares at liquidation value .......................................    2,600               2,600
   Common stock $.10 par value
       Authorized - 50,000 shares
       Outstanding - 12,341 shares at December 31, and September 30, 2000 ........................    1,234               1,234
   Additional paid-in capital ....................................................................   53,157              53,157
   Retained earnings .............................................................................    9,827               8,864
   Accumulated other comprehensive loss ..........................................................     (313)                (97)
                                                                                                     ------               -----
     Total Shareholders' Equity ..................................................................   66,505              65,758
                                                                                                     ------              ------
Total Liabilities and Shareholders' Equity ....................................................... $ 88,293            $ 92,500
                                                                                                   ========            ========

</TABLE>


           See notes to condensed consolidated financial statements.

                                       2
<PAGE>



                             OMEGA WORLDWIDE, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In Thousands, Except Per Share Amounts)



<TABLE>

                                                                                                Three Months Ended
                                                                                                    December 31,
                                                                                                    ------------
                                                                                             2000                   1999
                                                                                             ----                   ----
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Revenues:
   Patient services revenue .............................................................. $34,788                $24,594
   Fee income - Principal Healthcare Finance Limited .....................................   1,090                  1,317
   Fee income - Principal Healthcare Finance Trust .......................................     285                    242
   Interest Income:
     Principal Healthcare Finance Limited ................................................     967                  1,201
     Short-term investments ..............................................................     160                     51
   Other income ..........................................................................       -                     19
                                                                                            ------                 ------
                                                                                            37,290                 27,424
Expenses:
  Direct cost of patient services ........................................................  35,173                 25,448
  Direct costs of asset management .......................................................     680                    605
  Interest expense .......................................................................     231                    333
  General,administrative and other expenses ..............................................     495                    478
                                                                                             -----                  -----
                                                                                            36,579                 26,864
                                                                                            ------                 ------
Earnings before equity earnings and income taxes .........................................     711                    560
Equity in earnings of Principal Healthcare Finance Limited ...............................     400                    336
Equity in earnings of Principal Healthcare Finance Trust .................................     104                    176
Equity in earnings of Essex Healthcare Corporation .......................................      26                     75
                                                                                             -----                  -----
Earnings before income taxes .............................................................   1,241                  1,147
Income tax provision .....................................................................    (278)                  (250)
                                                                                             -----                  -----
Net earnings .............................................................................     963                    897
Net earnings allocated to preferred stock dividends ......................................     (52)                   (52)
                                                                                             -----                  -----
Net earnings available to common shareholders ............................................ $   911                $   845
                                                                                           =======                =======

Earnings per common share, basic ......................................................... $  0.07                $  0.07
                                                                                           =======                =======
Earnings per common share, diluted ....................................................... $  0.07                $  0.07
                                                                                           =======                =======
Average shares outstanding, basic ........................................................  12,341                 12,269
                                                                                            ======                 ======
Average shares outstanding, diluted ......................................................  12,341                 12,270
                                                                                            ======                 ======
Total comprehensive income, net of income taxes .......................................... $   747                $   705
                                                                                           =======                =======


</TABLE>

           See notes to condensed consolidated financial statements.

                                       3
<PAGE>

                             OMEGA WORLDWIDE, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)



<TABLE>
<CAPTION>

                                                                                                  Three Months Ended
                                                                                                     December 31,
                                                                                                     ------------
                                                                                                2000                1999
                                                                                                ----                ----
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Operating activities:
   Net earnings ............................................................................ $   963               $ 897
   Adjustments to reconcile net earnings to net cash used in operating activities:
     Equity in earnings of Principal Healthcare Finance Limited ............................    (400)               (336)
     Equity in earnings of Principal Healthcare Finance Trust ..............................    (104)               (176)
     Equity in earnings of Essex Healthcare Corporation ....................................     (26)                (75)
     Straight-line rent adjustment .........................................................     849                 681
     Depreciation and amortization .........................................................     349                 534
     Payments of Federal and foreign taxes .................................................     (75)               (633)
     Net change in operating assets and liabilities ........................................  (1,616)            (14,262)
                                                                                              ------             -------
Net cash used in operating activities ......................................................     (60)            (13,370)

Cash flows from financing activities:
   Proceeds from (repayments of ) revolving credit facility with bank ......................  (2,000)             11,825
   Repayment of revolving warehouse facility drawn by subsidiary ...........................    (254)             (1,605)
   Repayment of long-term borrowings by subsidiary .........................................    (203)               (394)
   Other ...................................................................................       -                 (35)
                                                                                               -----               -----
Net cash (used in) provided by financing activities ........................................  (2,457)              9,791

Cash flows from investing activities:
   Acquisition of plant, property and equipment by subsidiaries ............................    (699)                  -
   Increase in restricted cash .............................................................     (52)                  -
   Repayments from (temporary advances to) Principal Healthcare Finance Limited ............   2,036              (1,488)
   Proceeds from sale of Essex Healthcare investment .......................................     325                   -
   Proceeds from repayment of note receivable ..............................................      50                   -
   Dividends from affiliates ...............................................................       -                 174
   Cash received in acquisition of operating companies by Idun Health Care Limited
     net of cash consideration paid ........................................................       -                 727
   Other ...................................................................................     (14)                 10
                                                                                               -----                ----
Net cash provided by (used in) investing activities ........................................   1,646                (577)
                                                                                               -----                ----
Decrease in cash and short-term investments ................................................ $  (871)           $ (4,156)
                                                                                             =======            ========
</TABLE>



           See notes to condensed consolidated financial statements.

                                       4
<PAGE>



                              OMEGA WORLDWIDE, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                    Unaudited

                                December 31, 2000

Note A - Significant Accounting Policies

BASIS OF PRESENTATION

     The accompanying  unaudited condensed consolidated financial statements for
the  Company  have  been  prepared  in  accordance  with  accounting  principles
generally  accepted in the United States for interim  financial  information and
with  the   instructions  to  Form  10-Q  and  Article  10  of  Regulation  S-X.
Accordingly,  they do not include all of the information and footnotes  required
by accounting  principles  generally  accepted in the United States for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included.  Operating results for the three-month  period ended December 31,
2000, are not necessarily indicative of the results that may be expected for the
year ending September 30, 2001. For further information,  refer to the financial
statements and footnotes  thereto in the Company's annual report,  Form 10-K for
the year ended September 30, 2000.

      The balance  sheet at September  30,  2000,  has been derived from audited
consolidated  financial  statements at that date but does not include all of the
information and footnotes required by accounting  principles  generally accepted
in the United States.

     Certain prior quarter amounts have been reclassified to correspond with the
current quarter's presentation.


CONSOLIDATION AND SUBSIDIARIES

     The consolidated  financial  statements include the accounts of the Company
and its wholly owned subsidiaries after elimination of all material intercompany
accounts and transactions.  The Company's policy is to report the results of its
subsidiaries and equity method  investees on a one-month lag basis.  This allows
time to produce accounts in a local GAAP and then convert to an U.S. GAAP basis.

     The Company reports the results of those subsidiaries which it has over 20%
ownership,  but in which it does not hold a majority interest,  using the equity
method  of  accounting,  using a  one-month  lag  basis.  Investments  in public
companies over which the Company does not exercise  control are recorded at fair
market value.  Temporary changes in fair market value are charged to accumulated
other comprehensive  income, while permanent reductions in fair market value are
charged to operations.

RESTRICTED CASH

     The  Company  has  pledged  $670,000  of  cash  with a bank  as  collateral
guaranteeing the Company's  performance  under  short-term  purchase and sale of
foreign currency hedge positions.  The cash is restricted for periods no greater
than 30 days and is classified as  restricted on the balance  sheet.  This is in
addition to restricted cash of $1,799,000 supporting Idun's debt (See Note G)
and $389,000 of other restricted cash.

TRANSLATION

      Translation of currencies for foreign subsidiary financial  information is
computed  pursuant to the  provisions of Financial  Accounting  Standards  Board
Statement No. 52, which  provides  that balance sheet amounts are  translated at
the period-end  exchange rate and income statement amounts are translated at the
average-period exchange rate. There are no material amounts of exchange gains or
losses included in the results of operations for the three-month  periods ending
December 31, 2000 and 1999, respectively.


                                       5
<PAGE>

     Accumulated other comprehensive  income (loss) consists of the net exchange
gains and losses resulting from the translation of foreign financial  statements
and  charged  directly  to the balance  sheet as a  component  of  shareholder's
equity.

ACCOUNTING FOR CERTAIN DERIVATIVES INSTRUMENTS AND
 CERTAIN HEDGING ACTIVITIES

      In the first  quarter of fiscal year 2001,  the Company  adopted  SFAS No.
133,  "Accounting  for  Derivatives  Instruments  and Hedging  Activities."  The
adoption  of SFAS No.  133 did not have a  significant  effect on the  Company's
consolidated results of operations or financial position.

Note B - Principal  Healthcare  Finance  Limited  (Principal-UK)

     The following summarizes selected financial  information of Principal-UK in
accordance with accounting  principles  generally  accepted in the United States
(in thousands):

<TABLE>
<CAPTION>

Selected Operating Results for the period:                  2000         1999
                                                            ----         ----
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Revenues:
     Rent income ....................................... $ 13,860     $ 14,836
     Patient service revenue ...........................    2,170            -
     Interest income ...................................       32          118
     Other income ......................................    1,036        1,341
                                                            -----        -----
        Total revenues .................................   17,098       16,295
Expenses:
     Interest expense ..................................   (9,185)     (10,211)
     Depreciation and amortization .....................   (2,507)      (2,722)
     Direct cost of patient services ...................   (2,140)           -
     General and administrative ........................   (1,415)      (1,558)
                                                           ------       ------
        Total expenses .................................  (15,247)     (14,491)
                                                          -------      -------
Income from operations before income taxes .............    1,851        1,804
Provision for income taxes .............................     (592)        (737)
                                                            -----        -----
Net income from operations ............................. $  1,259     $  1,067
                                                         ========     ========

Average exchange rate ($ per(pound)) ...................   1.4496       1.6124

Selected Balance Sheet Information as of:          November 30, 2000  August 31, 2000
                                                   -----------------  ---------------
Investments in real estate subject to
  triple-net lease, net of depreciation ............... $ 371,542      $382,270
Total assets ..........................................   531,922       539,339
Non-recourse debt borrowing ...........................   433,534       445,887
Total liabilities .....................................   511,146       519,292
Total stockholders' equity ............................    20,776        20,047

Exchange rate ($ per(pound)) ..........................    1.4230       1.4600

</TABLE>

     The functional  currency of Principal-UK is the British pound sterling.  In
accordance  with FASB 52, the balance sheet amounts are translated at the period
end exchange rate and the income statement amounts are translated at the average
exchange rate for the period.

     The effective tax rates are 32% and 41% for the three-month  periods ending
November  30, 2000 and 1999,  respectively.  These rates  differ from the UK tax
rate primarily  because the provision for  depreciation  and amortization is not
deductible for tax purposes in the United Kingdom.  The Company's  proportionate
share of Principal-UK's  earnings for the three-month periods ended November 30,
2000  and  1999  are   approximately   $420,000   and   $356,000   respectively.
Additionally,   the  Company  has   recorded  a  charge   against   earnings  of
approximately  $20,000 for the  three-month  periods ended November 30, 2000 and
1999,  respectively,  representing  amortization  over a ten-year  period of the
excess of the Company's  investment in Principal-UK over its proportionate share
of Principal-UK's underlying equity.


                                       6
<PAGE>

Note C - Principal Healthcare Finance Trust(Principal-Australia)

     The  following  summarizes  selected  unaudited  financial  information  of
Principal-Australia  in accordance with generally accepted accounting principles
in the United States (in thousands):

<TABLE>
<CAPTION>

                                                                         Three-Month Period Ended
Selected Operating Results for the period ended:                November 30, 2000     November 30, 2000
                                                                -----------------     -----------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Revenues:
   Rent income ...................................................... $ 2,929              $ 2,914
   Interest income ..................................................     139                  155
   Other income .....................................................       9                   11
                                                                        -----                -----
       Total revenues ...............................................   3,077                3,080
Expenses:
   Interest expense .................................................  (2,000)              (1,947)
   Depreciation and amortization ....................................    (472)                (490)
   Amortization of  debt issue and organizational costs .............     (44)                 (79)
   General and administrative .......................................    (292)                (190)
                                                                        -----                -----
       Total expenses ...............................................  (2,808)              (2,706)
                                                                       ------               ------
Income from operations .............................................. $   269              $   374
                                                                      =======              =======
Average Exchange Rate ($ per A$) ....................................  0.5418               0.6415



Selected Balance Sheet Information as of:                       November 30, 2000     August 31, 2000
                                                                -----------------     ---------------
Investments in real estate subject to
   triple-net lease, net of depreciation ........................... $ 86,680             $ 88,298
Total assets .......................................................  108,584              116,255
Non-recourse debt borrowings .......................................   85,317               94,546
Total liabilities ..................................................   95,612              102,261
Total unit holders' equity .........................................   12,972               13,994
Exchange Rate ($ per A$) ...........................................   0.5212               0.5766

</TABLE>

     The functional currency of Principal-Australia is the Australian dollar. In
accordance  with FASB 52, the balance sheet amounts are translated at the period
end exchange rate and the income statement amounts are translated at the average
exchange rate for the period.

Note D - Acquisition of Idun Health Care Limited ("Idun")

         On October 31, 1999 the Company,  through its wholly owned  subsidiary,
Idun Health Care Limited, acquired the operating subsidiaries of Tamaris, plc, a
nursing  home  operating  company in the  United  Kingdom.  The 48  subsidiaries
acquired  operate 119 nursing homes  located  throughout  England,  Scotland and
Northern  Ireland.  The  fair  market  value  of the net  assets  at the date of
acquisition  was $7.2 million.  Fixed assets included in the $7.2 million amount
have been  written  down by $3.5  million  to  report  net  assets  equal to the
purchase price.

         Pro forma information for the Company, as if the Idun purchase had been
made as of October 1, 1999, is as follows:

                                                                Three-Month
Pro forma operating results for the period ended:              Period Ended
(in thousands, except per share data)                       December 31, 1999
                                                           ------------------

Revenues ...................................................... $ 39,765
Net earnings available to common shareholders .................      607
Earnings per common share, basic ..............................     0.05
Earnings per common share, diluted ............................     0.05
Average exchange rate ($ per(pound)) ..........................   1.6095


                                       7
<PAGE>

     Idun's results are included in the Company's  consolidated  results for the
entire three-month period ended December 31, 2000.

     The  functional  currency  of  Idun  is  the  British  pound  sterling.  In
accordance  with FASB 52, the balance sheet amounts are translated at the period
end exchange rate and the income statement amounts are translated at the average
exchange rate for the period.

Note E - Essex Healthcare Corporation

     The  Company  until  December  1,  2000  held   approximately  47%  of  the
outstanding  common  shares  of  Essex  Healthcare  Corporation  ("Essex"),   an
Atlanta-based  private operator of skilled nursing  facilities.  Essex's primary
activities are in Ohio,  where it operates 68 long-term care and assisted living
facilities   (approximately   4,200  beds).   It  also  manages  55   facilities
(approximately  2,800  beds) in  Indiana,  Wisconsin,  Michigan  and Texas.  The
Company accounted for this investment using the equity method.

     The Company's  proportionate  share of Essex's  income for the  three-month
periods ending November 30, 2000 and 1999 is approximately  $26,000 and $75,000,
respectively.

     In December  2000,  the Company  sold its  interest in Essex for  $325,000,
which approximated book value.

Note F - Earnings Per Share

     Earnings per share are computed  based on the  weighted  average  number of
common shares outstanding during the period.  Diluted earnings per share amounts
reflect the dilutive  effect of stock  options  (333 shares for the  three-month
period ending December 31, 1999, none for the three-month  period ended December
31, 2000). The assumed conversion of shares of preferred stock is antidilutive.

Note G - Credit Facilities

         The Company's  outstanding  indebtedness  consists of the following (in
thousands):

                                  December 31, 2000   September 30, 2000
                                  -----------------   ------------------
(1) Credit agreement ................ $ 2,850             $ 4,850
(2) Loan due on demand ..............   1,779               1,879
(3) Loan due February 2003 ..........   1,128               1,358
(4) Loan due February 2017 ..........   1,632               1,555
(5) Loan due April 2018 .............       -                 436
                                        -----               -----
                                        7,389              10,078
Less current maturities .............  (5,351)             (7,755)
                                       ------              ------
Long-term debt ...................... $ 2,038             $ 2,323
                                      -------             -------


1)   The Company's bank credit agreement as amended calls for scheduled payments
     to be made until fully repaid in June 2001.  Borrowings under the agreement
     bear interest at LIBOR plus 3.25% (9.69% and 9.91%  interest at December 31
     and  September  30,  2000,  respectively).  OHI provided a guarantee to the
     banks in  consideration  of a fee of 1%,  plus an  annual  25  basis  point
     facility fee. No further borrowings may be made under this agreement.

2)   Idun has a loan with a bank that is secured by the business and assets of a
     nursing  home  subsidiary  and carries an  interest  rate of 2.5% above the
     bank's base lending rate (8.50%  interest at December 31 and  September 30,
     2000, respectively).

3)   Idun has a loan with a bank that is secured by the business and assets of a
     nursing home company and carries a floating  interest rate of LIBOR plus 2%
     (8.01%  and  8.34%   interest  at  December  31  and  September  30,  2000,
     respectively).  The loan is  being  amortized  over  its life and  requires
     quarterly payments of approximately $156,000.


                                       8
<PAGE>

4)   Idun has a loan with a bank that is secured by the business and assets of a
     nursing home company and carries a floating  interest rate of LIBOR plus 2%
     (8.01%  and  8.34%   interest  at  December  31  and  September  30,  2000,
     respectively).  The loan is  being  amortized  over  its life and  requires
     quarterly payments of approximately $24,000.

5)   Idun's  unsecured  bank loan has been repaid in full.  The interest rate on
     this loan is at a bank's base rate less .5%(5.50% interest at September 30,
     2000).

The Company guarantees none of the loans of Idun. Cash of $1,779,000 included in
Restricted  Cash  will  be  used  for  partial  payment  of a  yet  undetermined
combination of items 2, 3 and 4 above.


Note H - Related Party Transactions

     Pursuant  to the  provisions  of a services  agreement  between OHI and the
Company,  indirect  costs  incurred  by OHI,  including  compensation  of shared
executive officers and related support personnel,  and costs incurred by OHI for
rent, insurance,  telephone,  utilities,  supplies,  maintenance and travel, are
allocated  to the  Company  based  upon the  relationship  of  assets  under the
Company's  management  to the combined  total of those assets and OHI's  assets.
Assets and costs in the formula are on a one-quarter lag basis. Such allocations
were based on estimates and formulas that management  believed to be reasonable.
The service agreement expired June 30, 2000. The Company and OHI have negotiated
a new arrangement,  which excludes certain previously  provided  services,  most
significantly,   those  of  shared   executives.   Allocated  expenses  for  the
three-month periods ending December 31, 2000 and 1999 were approximately $34,000
and $174,000, respectively.


     OHI holds  preferred  shares in the Company of $2.6 million at December 31,
2000. The preferred  shares are entitled to cumulative  undeclared  dividends of
$572,000 prior to any distribution to common shareholders.

     Temporary  unsecured  advances to Principal-UK in the amounts of $8,757,000
and  $10,793,000  are  outstanding  at  December  31  and  September  30,  2000,
respectively.  Interest  on the  temporary  advances  is  9.25%,  paid  monthly.
Interest arising from temporary advances to Principal-UK is included in interest
income for the three-month periods ended December 31, 2000 and 1999 and amounted
to $250,000 and $417,000, respectively.

     A  subordinated  loan to  Principal-UK  in the  amount  of  $23,805,000  is
outstanding at December 31 and September 30, 2000, respectively. Interest on the
subordinated  loan is  12.93%  at  December  31 and  September  30,  2000,  paid
semi-annually.  The loan  matures on June 30,  2001.  Interest  arising from the
subordinated   loan  to  Principal-UK   included  in  interest  income  for  the
three-month  periods ended  December 31, 2000 and 1999 is $717,000 and $784,000,
respectively.

     Fees from services  provided to Principal-UK  for the  three-month  periods
ended December 31, 2000 and 1999 are $1,090,000 and $1,317,000, respectively.

      Fees from services  provided to  Principal-Australia  for the  three-month
periods ended December 31,2000 and 1999 are $285,000 and $242,000, respectively.

     Rent  expense,  included  in direct  cost of patient  services,  related to
Idun's leases with  Principal-UK for the three-month  periods ended December 31,
2000 and 1999 is approximately $3,440,000 and $2,457,000, respectively.


                                        9

<PAGE>


Item 2 - Management's Discussion and Analysis of Financial Condition and Results
         of Operations

     "Safe  Harbor"  Statement  under  the  United  States  Private   Securities
Litigation  Reform  Act of  1995.  Statements  that  are  not  historical  facts
contained in Management's Discussion and Analysis are forward-looking statements
that involve risks and  uncertainties  that could cause actual results to differ
from projected  results.  Some of the factors that could cause actual results to
differ  materially  include:  the  financial  strength of the  operators  of the
facilities  owned by the  Company's  investees  as it affects  their  continuing
ability  to meet  their  obligations  under the  terms of the lease  agreements;
changes in operators or ownership of operators;  government  policy  relating to
the  healthcare  industry,   including  changes  in  the  reimbursement  levels;
operators'  continued  eligibility to  participate  in the government  sponsored
payment  programs;   changes  in  reimbursement  by  other  third-party  payors;
occupancy levels at the facilities;  the availability and cost of capital of the
Company and its investees;  the strength and financial  resources of competitors
of the Company and investees;  the ability of investees to make  additional real
estate  investments at attractive yields; and the ability of investees to obtain
debt and equity capital at reasonable costs.

     Following  is a  discussion  and  analysis  of the  Company's  consolidated
results of operations,  financial condition and liquidity and capital resources.
The  discussion  should  be read in  conjunction  with the  unaudited  condensed
consolidated financial statements and accompanying footnotes.

Results of Operations

     The Company generates income from four primary sources: (1) fee income from
providing investment advisory and management services;  (2) interest income from
providing  financing to companies in the  healthcare  and  healthcare  financing
industries;  (3)  operating  nursing  homes in the United  Kingdom  through  its
wholly-owned  subsidiary,  Idun  Health  Care Ltd.  ("Idun");  and (4) equity in
earnings of companies in the healthcare and healthcare financing industries. The
Company's  results for the three months ended December 31, 1999 include only two
months of Idun's operations since its acquisition on November 1, 1999.

Revenues

     Patient  services  revenue from the Idun operations was $34,788,000 for the
quarter  ending  December 31, 2000  compared  with  $24,594,000  for the quarter
ending December 31, 1999, which includes Idun's  operations for only two months.
The average occupancy rates for the quarters were 89.8% and 88.0%, respectively.
Increased  marketing focus throughout Idun but specifically in the England homes
that have lower  occupancy  than those in  Scotland  and  Northern  Ireland  has
improved  occupancy  rates.  The Company  acquired  Idun with the  intention  of
bringing  occupancy  up to levels  required for  profitability  and is directing
significant resources to this end.

     Fee income from Principal Finance Healthcare Limited (Principal-UK) for the
quarter ending December 31, 2000 was $1,090,000 compared with $1,317,000 for the
same  period in 1999.  The  decrease  primarily  relates to the  decrease in the
exchange  rate of the British  pound  sterling and  adjustments  to assets under
management  that are  defined by UK GAAP.  At December  31,  2000  assets  under
management  totaled  (pound)312  million  compared  with  (pound)309  million at
December  31,  1999.  Fee  income  from  Principal   Healthcare   Finance  Trust
("Principal-Australia")  increased to $285,000 for the quarter  ending  December
31, 2000 from  $242,000  for the  quarter  ending  December  31, 1999 due to the
growth of assets  under  management  to A$200  million at December 31, 2000 from
A$182 million at December 31, 1999.

     Interest income from  Principal-UK for the quarter ending December 31, 2000
was $967,000  compared with $1,201,000 for the same period in 1999. The decrease
was primarily caused by the reduction of temporary  advances from $19,856,000 at
December  31, 1999 to  $8,757,000  at December 31,  2000.  The interest  rate on
temporary  advances remains fixed at 9.25%;  however,  a decrease in the foreign
exchange  rate  also  contributed  to the  decline  in  interest  income.  These
decreases in interest income were offset by an increase in the subordinated debt
interest  rate of 12.93% at December 31, 2000 compared to 12.55% at December 31,
1999.


                                       10
<PAGE>


Expenses

     Direct cost of patient  services  was  $35,173,000  for the quarter  ending
December 31, 2000 compared with  $25,448,000 for the quarter ending December 31,
1999,  which  represented only two months of Idun's  operations.  Direct cost of
patient services is incurred in running the Idun  subsidiary's  nursing homes in
the United  Kingdom.  They exceed  patient  service  revenues  due to staff cost
pressures.  Minimum wage increases and increased costs of temporary services and
overtime  have  pushed  costs up  faster  than  government-determined  fees.  In
addition,  the long-term nature of the Company's operating leases with scheduled
rent  increases  results  in  significant  ($283,000  per month)  non-cash  rent
expense. The Idun nursing homes were unprofitable under previous management. The
Company has made progress during the last three months as direct cost of patient
services as a percentage of patient  service  revenues  declined to 101% for the
three-month  period  ending  December 31, 2000  compared  with 103% for the same
period in 1999.

     Direct costs of asset management increased 12% and general,  administrative
and other expenses  increased 4% during the  three-month  period ending December
31, 2000 compared with that of the same period in 1999.

     Interest  expense for the  three-month  period ending December 31, 2000 was
$231,000  compared with  $333,000 for the same period in 1999.  This decrease is
primarily  the result of the  scheduled  principal  payments  on the bank credit
agreement.

Other

     Equity in earnings  of  Principal-UK  increased  to $400,000 in the current
year quarter from  $336,000 in the prior year quarter.  The Company's  ownership
percentage in  Principal-UK  has remained  constant at 33.375%.  The increase in
income is due to improved  performance of  Principal-UK as its leased assets and
their  rents have  increased.  Equity in  earnings  of  Principal-Australia  was
affected by the A$182 million financing  completed in September 1999. Not all of
the proceeds  have yet been  reinvested  in rental  properties.  Although we are
pursuing numerous prospects,  the return on temporary investment is not adequate
to cover the interest expense.

     Until  December 1, 2000, the Company held  approximately  47% of the common
shares  of Essex  Healthcare  Corporation  ("Essex")  an  Atlanta-based  private
operator of skilled nursing  facilities.  The Company's  proportionate  share of
Essex's income was $26,000 in the current  quarter  compared with $75,000 in the
prior year quarter. In December 2000, the Company sold its interest in Essex for
$325,000, which approximated book value.

     The Company's  effective tax rate on a  year-to-date  basis varies from the
federal  statutory  rate of 34% due to the  benefit  of  available  foreign  tax
credits on equity in earnings of Principal  Healthcare  Finance Limited which is
reported after UK tax expense.


Liquidity and Capital Resources

     The Company has outstanding,  at quarter end,  $2,850,000 of corporate debt
under its line of credit  agreement  with Fleet Bank,  N.A. and Harris Trust and
Savings Bank. The agreement calls for scheduled  payments to be made until fully
repaid by June 30, 2001.  After investing an additional  $750,000 in Idun in the
month of January 2001, Idun is budgeted to generate  sufficient cash to fund its
operations for the remainder of the year. The Company's cash on hand,  cash flow
from fees and interest  income as well as  Principal-UK's  January  repayment on
temporary  advances and  anticipated  June  repayment on temporary  advances are
adequate to fund Idun's capital requirements and the repayment of debt under the
credit  agreement.  The  continued  cash flow from  Principal-UK  is  subject to
several risks,  most notably the ability of Principal-UK  tenants to continue to
meet rent  requirements  despite the impact of current  wage  pressures on their
operators;  however,  all  Principal-UK  debt has been extended to be concurrent
with the final due date of the Fleet line. As previously announced,  the Company
continues to pursue strategic  alternatives to maximize shareholder value and is
exploring the sale of certain or all of its underlying assets



                                       11
<PAGE>



Impact of Recently Issued Accounting Standards

     In the first quarter of fiscal year 2001, the Company adopted SFAS No. 133,
"Accounting for Derivative  Instruments and Hedging Activities." The adoption of
SFAS No. 133 did not have a  significant  effect on the  Company's  consolidated
results of operations or financial position.


Item 3.  Quantitative and Qualitative Disclosure About Market Risk

     The  Company  is  exposed  to  various  market  risks.  Market  risk is the
potential loss arising from adverse changes in market interest rates and prices,
such as short-term  borrowing and foreign  currency  exchange rates. The Company
does not enter into  derivatives or other  financial  instruments for trading or
speculative purposes. The Company enters into forward foreign currency contracts
principally to hedge currency  fluctuations  in its  investments  denominated in
foreign  currencies,  thereby  limiting the Company's risk that would  otherwise
result from changes in exchange  rates.  At December  31, 2000,  the Company had
outstanding  a  British  pound  sterling   forward  currency  swap  to  exchange
(pound)20,000,000  for  $31,740,000  to  mature  on  October  15,  2007,  and an
Australian  dollar forward  currency swap to exchange A$11.0 million  Australian
dollars for $6,749,000 to mature on July 3, 2003. From time to time, the Company
may also obtain hedges for its foreign currency  exposure  relative to temporary
loans to  Principal-UK  and Idun.  Because  of the  Company's  foreign  exchange
contracts,  its sensitivity to foreign exchange  currency exposure is considered
low.




                                       12
<PAGE>

PART II -   OTHER INFORMATION


Item 5.  Other Information


         Edward  Lowenthal  resigned  as  Director  effective  December 1, 2000.

         Edward C. Noble resigned as Chief Financial Officer effective
         February 1, 2001.


Item 6.  Exhibits and Reports on Form 8-K:

         (a) Exhibits - the following exhibits are filed herewith:

            Exhibit      Description
            -------      -----------

               3.2      Amended and Restated Bylaws of Omega Worldwide, Inc.,
                        filed herewith

               27       Financial Data Schedule


         (b) Reports on Form 8-K - None were filed.


                                       13
<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                              OMEGA WORLDWIDE, INC.
                                   Registrant

                                              By   /s/  JAMES P. FLAHERTY
                                              ---------------------------
                                                        James P. Flaherty
February 14, 2001                                       President



                                       14